New name and strategy for AC's The Atlantic Club

Michael Frawley, chief operating officer of The Atlantic Club, discusses the Atlantic City N.J. casino's new free parking policy on Tuesday, March 13, 2012, the day the casino changed its name from ACH. The casino, which also used to be known as The Atlantic City Hilton Casino Resort, is cutting its food prices, offering low-stakes table games, and offering free parking as part of its new value price strategy. (AP Photo/Wayne Parry)
— AP

Michael Frawley, chief operating officer of The Atlantic Club, discusses the Atlantic City N.J. casino's new free parking policy on Tuesday, March 13, 2012, the day the casino changed its name from ACH. The casino, which also used to be known as The Atlantic City Hilton Casino Resort, is cutting its food prices, offering low-stakes table games, and offering free parking as part of its new value price strategy. (AP Photo/Wayne Parry)
/ AP

The casino is eating the $3 state-mandated parking assessment on each car that enters its garage.

"We think our customers are worth it," Frawley said. "Quite honestly, it's a cost of doing business now for us. We had heard from a lot of our customers that the one thing they really didn't like was paying to park, and if you're going to be a value-priced casino, you have to walk the walk."

The casino very nearly shut down last year. It had been for sale for two years, but could not land a buyer. Its owners, Los Angeles hedge fund Colony Capital LLC, stopped paying its mortgage in 2009 because the money simply wasn't there.

In a deal reached last November. Colony agreed to pump $15 million into it to keep it afloat. In return, lenders foreclosed on and took ownership of two casinos in Mississippi that Colony owned, Bally's Tunica and Resorts Tunica, and wiped out the mortgage debt for what was then called ACH.

The deal also gave the casino an additional infusion of $9.3 million in cash from insurance proceeds from an August 2009 flooding claim. All told, it gave Colony $24.3 million in new funds to invest in the casino and help keep it running.

It slashed expenses, including laying off 150 employees the day after the rescue plan was approved by New Jersey casino regulators, giving it some more breathing room. Frawley said projections call for The Atlantic Club to break even by the fourth quarter of this year, and to turn a modest profit in 2013.

For the first two months of this year, The Atlantic Club has taken in just under $16.2 million. That's the worst total among Atlantic City's 11 casinos, and is down nearly 25 percent from the same period a year ago.

But Frawley said the casino is starting to see modest increases in food and beverage revenue and in hotel occupancy in recent weeks - an encouraging sign during one of the deadest portions of the calendar.

The casino is reducing the amount of slot machines from about 1,850 to 1,500, but it's installing the newest brands and titles - something that hasn't been done on a large scale for many years, Frawley said.

It also plans to heavily promote its restaurants and bars, many of whom look as elegant as those in the city's top casinos.

"This is not cut-price, low-quality," he said. "When people hear 25-cent gambling chips, they think Formica countertops. That's what I've got to dispel."